Cross Border Resources, Inc. (OTCQX: XBOR),  a San Antonio-based oil and gas exploration and production company, today provided an operations update on its two Wolfberry projects in the Permian Basin of West Texas.
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The Company and its partners have been successful in limiting water production, with complementary oil production increases, from the first four Wolfberry wells. Initial well results disseminated by the Company indicated low production rates due to excessive water volumes. In early August, prior to remedial changes, the wells averaged 8 barrels of oil per day (bopd) and 266 barrels of water per day (bwpd) overall, or an oil cut of 2.9%. The wells now average 71 bopd and 145 bwpd, with oil cut improving to 32.9%.

Early reports indicated the wells' operator felt there was communication between a water zone and one of the targeted formations that was fractured stimulated, thus contributing to the low oil volumes.  Cross Border management and its partners determined it would be necessary to set a temporary bridge plug in each of the wells, at various depths, to determine what specific zone was contributing the excess water.

"Management is pleased that our partners have identified the water-bearing zone, allowing for greater oil production," said Everett "Will" Gray II, CEO and Chairman of Cross Border. "The initial evaluation of these projects provided rates of return in excess of 35%, thus prompting management to participate in these two Wolfberry projects. Although combined daily production from all four wells is approximately 284 bopd, or an average of 71 bopd per well, it is important to note that this production is only from three of the seven zones that were frac stimulated.

"We anticipate that production will continue to trend upward following optimal placement of the bridge plugs over the next several weeks," Gray continued. "Production volumes from these two Wolfberry projects are expected to represent approximately 50 net bopd, thus 10% of the projected production exit rate for 2011."

Source: The Sacramento Bee 


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